Cloud computing is a way of satisfying computing needs via the Internet — as opposed to making potentially expensive hardware and software investments.
The term refers to how the Internet is depicted in computer network diagrams. It takes the concept of “utility computing” a step further by incorporating features of Web 2.0 and software-as-a-service. This handy InfoWorld primer defines cloud computing as “any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.”
The appeal of cloud computing lies in its simplicity for the end user, who has access to software and hardware on demand, with no need to understand how it all works — or pay for capacity that he doesn’t need. Such flexibility can be a particular boon for start-ups, argues Inc. magazine’s Michael Fitzgerald.
But cloud computing comes with risks as well, particularly for firms concerned with data security, and the providers, such as Amazon, are working to address them.
Some Web 2.0 thinkers, such as Steve Gillmor at TechCrunchIT, see the greatest payoff from cloud computing emerging as it intersects with social media — and everyone relaxes a bit about who has access to their data. “The more social graph data is baked into these information sharing transactions, the more valuable the shared data will become.”